Glossary

Expectancy

What one average trade is worth to you, after the wins and losses cancel out.

Last updated: 2026-07-28

Expectancy is what an average trade puts in your pocket once the wins and losses are netted against each other. In R it shows up as EV per trade, so a system that runs at +0.2R EV gives you 0.2R on a normal trade. That one number decides whether you have a business or a hobby, literally. You can win 8 out of 10 trades and still go backwards if the 2 losers are fat enough (negative EV), which is why win rate lies to so many people.

But... what is expectancy?

Just split your total R / total Trades (your per trade R multiple data), and whatever is left is what a trade is worth before you take it. Above zero after costs, you have an edge. At or below zero, you are paying the market for opening trades. It says nothing about the ride, though. A system can sit at a healthy +0.3R and still put you through a 15 trade losing streak that ends your account before the average ever shows up if your risk isn't on point.

Why does win rate fool people and expectancy doesn't?

Win rate only counts how often you are right. Expectancy tells how much you make and lose too. A trend system that wins 35% of the time at +0.6R quietly beats a scalper winning 70% at +0.05R, even though the scalper feels like a genius and the trend trader feels wrong most days. The market doesn't pay you for being right. It pays you for being right about size.

What is a good number?

It depends on how often you trade. A +0.05R edge over 2,000 trades a year is a real machine. The same +0.05R over 40 trades a year is noise you cannot tell from luck. Most retail systems that actually work land between +0.1R and +0.4R per trade after costs. If you see +0.8R... check your data before you get excited, because that is usually a tiny sample or a couple of freak trades doing the job. If you're not sure your sample's big enough, start with how many trades you need.

Frequently asked questions

Expectancy is the average result of one trade once wins and losses are combined. In R it is your EV per trade, so +0.2R means a normal trade gives you 0.2R. You need it positive after costs to have an edge.
Add up your R across every trade and divide by the number of trades. 50 trades that came to +12R total is +0.24R expectancy. That's the whole calculation.
No, and treating them as the same is one of the priciest mistakes around. A 70% win rate with small wins and big losses can still lose money. Win rate is one ingredient, expectancy is the meal.
Because a handful of lucky trades can fake a great number. Quantprove discounts small samples in your [Edge Score](/glossary/edge-score) and only reaches full weight near 500 trades, so a figure from 30 trades gets treated as the thin evidence it is.

References

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